Latest news with #GuidingandEstablishingNationalInnovationforUSStablecoins
USA Today
02-08-2025
- Business
- USA Today
XRP is the smartest cryptocurrency to buy with $500 right now
XRP is demonstrating its long-term growth potential. Nowadays, $500 doesn't feel like much — especially if you invest it in the S&P 500 index, where you can expect to make an average annual return of 10% (assuming historical trends remain constant). That's just $50 per year. However, the cryptocurrency industry offers the potential for significantly larger gains than traditional asset classes, like stocks or bonds, for investors who are willing to tolerate more volatility. Below I'll explore why the payments-focused token digital XRP (CRYPTO: XRP) might make an excellent long-term pick as it racks up regulatory wins in the U.S. and seeks to disrupt the market for international transactions. The regulatory climate is easing Donald Trump's presidential election victory sparked a sharp rally in many cryptocurrencies, and it isn't hard to understand why Wall Street is so optimistic. On the campaign trail, he promised to support the digital asset industry and, so far, his administration is meeting or even exceeding expectations with a raft of newly passed legislation. On July 18, Trump signed the Guiding and Establishing National Innovation for US Stablecoins (Genius) Act, which is designed to create a framework for issuing dollar-pegged stablecoins. On its face, this law helps legitimize cryptocurrency as a mainstream asset class, which will encourage businesses and institutional investors to get more involved without the fear of potentially breaking any rules. The Genius Act is a departure from the climate under the previous administration, when lawsuits and enforcement stifled crypto adoption. XRP's developer, Ripple Labs, was affected by this legal uncertainty. In 2021, Ripple lost its partnership with one of its highest-profile clients, MoneyGram, which stopped using its XRP-based liquidity solutions after Ripple was sued by the Securities and Exchange Commission (SEC) over alleged securities law violations. The case has now been largely resolved with XRP not classified as a security when sold to retail investors, although there are still discussions about settling fines related to Ripple's sales of XRP to institutional investors. The path to real-world utility XRP's main selling point is its focus on real-world utility. Instead of trying to be a platform for highly speculative and often useless decentralized applications (dApps), XRP focuses on the more tangible market for international payments. Its speed and low fees (0.00001 XRP per transaction) make it an ideal bridge between different currencies. For example, if someone in the U.S. wanted to send money to Japan, they could buy XRP with dollars and use that XRP to buy Japanese yen, bypassing slow and potentially costly intermediaries. Dollar-pegged stablecoins promise to make this process even easier by removing the volatility inherent in a free-floating bridge currency like XRP. Instead of allowing its niche to be disrupted, XRP's developers are joining the fray. In 2024, they launched a dollar-pegged stablecoin of their own called RLUSD. Consumer use of RLUSD can indirectly benefit XRP because both tokens are built on the same network. RLUSD transaction fees are paid with XRP, which is then removed from circulation (burned). Is it too late to buy XRP? Despite its relatively small unit price of just $3.15 at the time of this writing, XRP is the third-largest cryptocurrency, with a market cap of $187 billion. While this vast size gives it more brand recognition and stability, it also means that investors shouldn't expect a repeat of the explosive returns XRP enjoyed in the past. That said, slow and steady often wins the race. XRP has graduated from the boom and bust volatility of a meme coin, and investors should focus on its long-term growth potential as it benefits from easing regulatory pressure and compelling real-world use cases. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in XRP right now? 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Economist
24-07-2025
- Business
- Economist
The world should follow Trump's lead on stablecoins
America's new law on stablecoins is so good, 'They named it after me,' joked President Donald Trump as he signed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act on July 18th. While the administration and the crypto industry celebrate the dawn of a golden age, the mood across the Atlantic is darker. Stablecoins, tokens backed by conventional assets, are seen as scammy, deeply destabilising—or both. Andrew Bailey, governor of the Bank of England, has warned commercial banks against issuing their own coins. Christine Lagarde, head of the European Central Bank (ecb), cautions that stablecoins could become private money that risks one day dislodging central banks.
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Business Standard
22-07-2025
- Business
- Business Standard
Why JPMorgan may offer crypto loans despite CEO Dimon's bitcoin doubts
JPMorgan Chase is exploring the idea of lending directly against clients' cryptocurrency holdings, such as bitcoin and ethereum, the Financial Times reported. This would be a significant move for the US headquartered bank and reflects a growing acceptance of digital assets within the traditional banking system. The bank could begin such lending as early as next year, although the plans are still under discussion and may change, the news report said. Why is this move surprising for JPMorgan's CEO Jamie Dimon? The potential policy shift marks a major turnaround for JPMorgan CEO Jamie Dimon. Eight years ago, Dimon called bitcoin a 'fraud' and said it would 'eventually blow up'. He also claimed it was mainly used by 'drug dealers and murderers', and even threatened to fire any trader caught dealing in bitcoin. However, Dimon has recently softened his stance. Speaking in May this year, he said, 'I don't think you should smoke, but I defend your right to smoke. I defend your right to buy bitcoin. Go at it.' His earlier strong opposition put off some clients who had earned their wealth through crypto or were long-term supporters of its potential. What steps has JPMorgan already taken in crypto? JPMorgan has gradually taken steps to engage with the crypto space. It already plans to offer loans backed by crypto exchange-traded fund (ETF) holdings — a more regulated way to gain crypto exposure, the news report said. Lending against the actual crypto assets themselves would be a bigger leap, especially as rival banks like Goldman Sachs still do not accept crypto as collateral. Why are more banks warming up to crypto now? The shift in attitude among big banks is partly due to a changing political climate. A possible second Trump administration is seen as more favourable to light-touch crypto regulation than President Joe Biden's. On July 18, President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins). This is the country's first federal framework for regulating stablecoins. The act requires full reserve backing in liquid assets, regular audits, and stronger consumer protections. Large banks welcomed the legislation as it provides regulatory clarity and makes it easier for them to engage with digital assets. What makes stablecoins different from other cryptocurrencies? Stablecoins are a type of digital asset pegged to a stable reference, like the US dollar. Unlike cryptocurrencies like bitcoin — which are highly volatile and not backed by tangible assets — stablecoins are designed to maintain a consistent value. They are used widely in payment systems, particularly in regions with limited or poor banking infrastructure. Stablecoins also play a key role in decentralised finance (DeFi) ecosystems, like: -Serve as collateral for crypto-backed loans. -Support liquidity in decentralised exchanges and lending protocols. -Help users hedge against cryptocurrency price volatility. What challenges does JPMorgan face in lending against crypto? One of the major hurdles is figuring out how to handle digital assets seized from clients who default on their loans. Cryptocurrencies require specific custody solutions, and most banks, including JPMorgan, do not hold crypto directly on their balance sheets. To solve this, JPMorgan would likely partner with a third-party custodian — companies like Coinbase, which offer secure storage for crypto on behalf of institutional clients, the news report said.
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Business Standard
21-07-2025
- Business
- Business Standard
Decoded: What are stablecoins, and why is the US regulating them?
On July 18, United States (US) President Donald Trump signed the GENIUS Act—Guiding and Establishing National Innovation for US Stablecoins—introducing America's first federal framework for dollar-pegged cryptocurrencies. The act mandates full reserve backing in liquid assets, monthly audits, and stronger consumer safeguards. While signing the act into law, Trump said that it creates "a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins". He further stated that the act "could be perhaps the greatest revolution in financial technology since the birth of the internet itself". What are stablecoins? Stablecoins are digital assets, which means they have a value attached to them and can be used for transactions. They are designed to maintain a stable value relative to a specific reference asset, like a fiat currency such as the US dollar. Unlike cryptocurrencies, which experience significant price fluctuations due to speculation and limited supply mechanisms, stablecoins intend to provide price predictability. What backs stablecoins? Stablecoins can be broadly categorised based on their collateral mechanisms. Each category presents a different method for maintaining price stability: 1. Fiat-collateralised stablecoins: These stablecoins are backed by reserves of fiat currency held in bank accounts or other arrangements. The most common examples—such as Tether (USDT) and USD Coin (USDC)—are pegged to the US dollar. For every unit of stablecoin issued, an equivalent amount in fiat currency is supposedly held in reserve. These stablecoins rely heavily on trust in the issuer and the auditing of reserve holdings. Concerns have been raised in the past regarding the transparency and adequacy of these reserves, prompting countries to explore regulatory frameworks for the same, like the GENIUS Act. 2. Crypto-collateralised stablecoins: These are backed by other cryptocurrencies, which are typically over-collateralised to account for price volatility. For example, DAI, a widely known decentralised stablecoin, is backed by Ethereum and other crypto assets held in smart contracts on the blockchain. Blockchain is a distributed digital ledger that records transactions in a secure way, allowing assets to be tracked across a network. Smart contracts are digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met. For example, DAI is liquidated when the value of the cryptocurrency backing it falls below a certain threshold. These are still exposed to the inherent volatility of the underlying crypto assets and may face issues during market stress. 3. Algorithmic (non-collateralised) stablecoins: Algorithmic stablecoins use mathematical formulas and incentive mechanisms to manage the coin supply and maintain a peg without relying on actual collateral. They automatically expand or contract the supply of tokens based on demand. TerraUSD (UST), which collapsed in 2022, was one such example. 4. Commodity-collateralised stablecoins: Some stablecoins are backed by physical commodities such as gold or silver. These include coins like PAX Gold (PAXG), where each coin represents ownership of a specific amount of physical gold held in reserve. Uses of stablecoins Stablecoins serve several purposes across retail, institutional, and decentralised finance sectors: Payments: Due to lower transaction fees and faster settlement times, stablecoins are increasingly used for cross-border transfers, particularly in regions with limited access to banking infrastructure. Stablecoins are also integral to decentralised finance platforms, where they serve as collateral for loans, liquidity provision, and decentralised exchanges. Hedging against volatility: Investors often convert volatile crypto holdings into stablecoins to preserve value during market downturns. Risks associated with stablecoins Despite their intended stability, stablecoins are not without risks. As their market capitalisation has grown, regulators and policymakers have raised several concerns. One of the most prominent concerns is whether stablecoin issuers actually hold sufficient, liquid, and accessible reserves to honour redemptions. Here's where legislation like the GENIUS Act steps in. It requires 100 per cent reserve backing with liquid assets like US dollars or short-term Treasuries and requires issuers to make monthly, public disclosures of the composition of reserves. According to the White House press release, "In the event of insolvency of a stablecoin issuer, the GENIUS Act prioritises stablecoin holders' claims over all other creditors, ensuring a final backstop of consumer protection". Alternatives to stablecoins As stablecoins gain popularity, several alternatives are being explored to address their risks and limitations—particularly by regulators and central banks. Central Bank Digital Currencies (CBDCs) are the most prominent alternative. Unlike stablecoins, CBDCs are issued by central banks and carry sovereign backing. They aim to offer secure, programmable digital payments without the volatility of crypto. India also has a CBDC backed by the Reserve Bank of India, known as the digital rupee or e-rupee. Tokenised deposits: These are digital versions of regular bank deposits issued on blockchain platforms, allowing instant settlement and integration with smart contracts. E-money and digital wallet balances, while not blockchain-based, are widely used. These are backed by fiat reserves and regulated under existing financial rules. As countries continue to shape regulatory frameworks and central banks explore digital alternatives, the journey ahead for stablecoins will likely depend on their ability to operate securely and transparently within the financial system.
Time of India
19-07-2025
- Business
- Time of India
Donald Trump's Genius Act: Major crypto bill for stablecoins passed in US; here is what to know
US President Donald Trump on Friday signed the "GENIUS Act," a new law aimed at regulating payment stablecoins, marking a significant step toward bringing legitimacy and oversight to the cryptocurrency industry. The law, officially titled "Guiding and Establishing National Innovation for US Stablecoins," represents a major policy shift for digital assets in the US. The new law received strong support in both the House and Senate, passing with wide bipartisan backing. Speaking at a White House signing ceremony attended by around 200 people, including prominent crypto executives and top Republican lawmakers, Trump called the law a 'massive validation' of the industry's efforts. 'For years you were mocked and dismissed and counted out,' he told the attendees. 'This signing is a massive validation of your hard work and your pioneering spirit," the US president added. Later, taking to Truth Social, he wrote "I pledged that we would bring back American liberty and leadership and make the US the crypto capital of the world—The Genius Act creates a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins…" What is Trump's GENIUS Act? The 'Guiding and Establishing National Innovation for US Stablecoins" or GENIUS Act is a set of regulatory frameworks aimed at establishing oversight and consumer protections for stablecoins, cryptocurrencies tied to traditional assets like the US dollar to reduce price volatility. It lays down foundational rules for stablecoin issuers, aimed at improving consumer confidence in a segment of crypto that has seen explosive growth, as per AP. The new law is a big step for an industry that has quickly gained political influence in Washington, thanks to heavy lobbying and campaign donations. Political stance A notable provision in the new law prohibits members of Congress and their families from profiting off stablecoins, a move intended to address concerns over conflicts of interest, according to AP. However, the ban does not apply to the president or his family. Trump's family is known to hold a significant stake in World Liberty Financial, a crypto firm that launched its own stablecoin earlier this year, backed in part by an investment fund from the United Arab Emirates. The House also advanced two additional crypto-related bills on Thursday. One proposes a new market structure for the broader cryptocurrency space, while the other seeks to block the Federal Reserve from issuing a central bank digital currency. Both measures now await consideration in the Senate. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
